No day goes by without a fresh announcement of job cuts, layoffs and redundancies. The worst hit sectors have been IT, financial services, manufacturing and the airline and tourism industries. Here is a guide to the 10 biggest mistakes to avoid when cutting jobs:
1. FORGET THE BLACK BIN LINER
The black bin liner procedure is the most common brutal way to manage redundancies; employees are simply handed a bin liner and ordered to clear their desks immediately. And yet they have a right to be treated with respect rather than as disposable resources; this inhumane process illustrates the failure to train the managers who deal with redundancies. Management must learn to understand and appreciate the hardship of being forced out of a job, and plan and rehearse the delivery of their message. As far as human emotions are concerned responses are difficult to predict; people need to be trained in preparation for these positive and negative reactions. Considerable planning is required for a mass layoff; the organisation needs to be committed to creating an identical message.
2. THINK CAREFULLY BEFORE REDUCING HEADCOUNT
Cutting headcount is the easiest thing for human resources departments to do, and it's almost always the wrong answer. However, alternative short-term solutions to short-term employment issues such as secondment on half pay are encouraged by companies. The idea of time off for travel or returning to business school is often very appealing for those who did not take time out before university.
3. MAKING THE RIGHT CUTS
If the wrong ten percent of cuts are made you could cut a hundred percent of the firm’s value position. Diagnosis is vital; a systematic talent management audit should be carried out in order to pin point the most critical assets of a sizable organisation. The appropriate value criteria in the company must be determined when selecting individuals for redundancy. If you are unaware of where the value lies, management is likely to be subjected to scrutiny by shareholders.
A number of companies ask for volunteers rather than selecting specific candidates in relation to the company’s needs. This is a failure to manage the procedure because voluntary redundancy programmes have generally proven to lose those with the most marketable skills prior to others. There is no obligation for the employer to accept voluntary redundancy applications; if a company can achieve its cost-cutting aims while avoiding compulsory redundancy, their management is legally and psychologically advantaged.
One classic mistake is using old age as a selection criteria; corporate wisdom is often free to walk out the door when age is discriminated against rather than quality. Corporate values must be maintained along with the culture and knowledge which tend to separate one organisation from another.
4. SEEK LEGAL ADVICE
The HR department is regularly caught in the middle. Once the management has made its decision it wants to push on, however the decision must be balanced against punitive legal decisions as well as moral obligations. It is vital to incorporate legal advisers in the early stages to avoid having to make costly procedure alterations and decisions later on.
When dealing with unions, you need to be fair in how you deal with the soon-to-be-redundant person in question as well as fair from an economic and business perspective. Your principle for selection needs to be objectively measured if required; subjective management decisions such as the person’s commitment to the company should be avoided unless you have managed to measure it consistently over a period of time prior to this process.
You must consider realistic time frames; picture months rather than weeks to complete a programme. However, in certain circumstances the generosity of the settlement can help a company to act decisively and drastically. Employers may deduct that the risk of ignoring the law to fast-track layoff programmes and tribunals may even support the decision.
5. AVOID MANAGEMENT-SPEAK
Management-speak such as downsizing and organisational collateral cause just as much antagonism as more aggressive terms such as fired. The words are inhuman, seeing the issue in purely economic terms. It is easy to dress up the explanation and confuse the employee but words count. Employers should be straightforward in these circumstances. Falseness is another thing people are aware of. Actions speak louder than words, so no matter what an organisation says people watch what is actually done.
6. BE GENEROUS
The statutory minimum proves negative in the long term and may even result in legal penalties. Generosity concerning time, money and communications is vitally important especially with the employer brand in mind. These people may be representatives of your brand for years to come. You should also remember new recruits and professional head hunters.
7. TREAT PEOPLE AS INDIVIDUALS
HR often try to herd people through the process as quickly as possible like cattle, neglecting a proper communication programme. Every individual is deserving of a one-on-one meeting as well as collective meetings and the programme must provide this. Independent counselling is also recommended, providing financial and legal advice. However, wider constructive advice is offered by outplacement consultancies: helping employees to rehearse the news to their family, help for reworking CVs, interview practices and much more. These outplacement consultancies are vital in showing individuals how their skills are transferable.
8. INVEST IN THE SURVIVORS
It is easy to forget those survivors during and after the complicated process of cutting staff. It is vital that these people are invested in, through one-to-one meetings, making senior management more visible and by investing in training and motivation incentives. Their belief in the company and its future is also necessary to prevent the redundancy exercise from failing.
9. COMMUNICATE
The process of communication must be managed effectively as the truth can too easily be circulated during complex decisions. It is more effective to provide the truth as early as possible rather than letting it out bit by bit; timing is everything. It is best to inform staff of information such as upcoming announcements to the stock exchange before they hear it from elsewhere. HR departments should work closely with PR, internal communications and industrial relations.
However, obstacles inevitably arise, such as the agreement that requires listed companies to inform the Stock Exchange and shareholders of proposed redundancies. In theory, prior to the announcement concerning major layoffs, a period of consultation with the unions is compulsory and the Stock Exchange expects this information first-hand. This then puts pressure on management to make an announcement as soon as the consultation period commences, which subsequently irritates the unions who may claim that management is failing to negotiate.
You should explain to unions and staff how the process will unfold at the very beginning, without denying the facts; honesty is the key.
DON'T FORGET ABOUT THE HR DEPARTMENT
Lastly, you must consider your own team. The casualties of redundancy programmes are often HR departments, however it is vital that the survivors and the implementers of these actions are not left without aid. |
